ISLAMABAD: Pakistan’s finance minister Muhammad Aurangzeb announced a 17.5 percent increase in the country’s defense budget on Wednesday, saying the government had decided to allocate Rs2.12 trillion ($6.15 billion) for the country’s security needs in view of its geopolitical situation.
Pakistan’s defense budget consistently attracts media attention due to the military’s substantial role in both the political and economic arenas of the country.
The allocation of significant funds to defense sparks debates over the balance between security needs and other critical public services, such as education and health care.
Media coverage and public discussions also reflect concerns about transparency, with governments only mentioning the overall figure without sharing further details.
“Rs2.122 trillion will be provided for defense needs,” the finance minister said during his address to the National Assembly. “And Rs849 billion are being allocated for civil administration expenses.”
Last year, the defense allocation stood at Rs1.80 trillion ($5.23 billion).
According to Pakistan’s Dawn newspaper, the allocated amount “presents an incomplete picture of the country’s actual military expenditure.”
“A significant sum of Rs662 billion [$1.92 billion], designated for retired military personnel, which equals to about 31pc of allocation for the armed forces, will not be drawn from the defense budget, rather government’s current expenditure,” it reported.
Pakistan has witnessed a surge in militant violence in recent years, prompting its armed forces to carry out targeted operations in areas adjoining its border with Afghanistan.
Pakistan’s army and other law enforcement agencies are also responsible for the providing security to Chinese nationals working on the China-Pakistan Economic Corridor, which is widely viewed as pivotal to the country’s economic security.
Militant groups have periodically targeted these Chinese workers, killing five of them earlier this year in a suicide bombing in Pakistan’s northwest while they were going to the site of a hydropower project.
Pakistan raises defense budget by 17.5% to $6.15 billion amid surge in militancy
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Pakistan raises defense budget by 17.5% to $6.15 billion amid surge in militancy
- Defense spending in Pakistan draws media focus as debates over security needs and public services persist
- Media coverage also reflects concerns about transparency, with few details available on the overall spending
Pakistan, ADB sign $730 loan agreements to boost SOE reforms, energy infrastructure
- Both sign $330 million Power Transmission Strengthening Project and $400 million SOE Transformation Program loan agreements
- Economic Affairs Division official says Transmission Project will secure Pakistan’s energy future by strengthening national grid’s backbone
KARACHI: Pakistan and the Asian Development Bank (ADB) on Thursday signed two loan agreements totaling $730 million to boost reforms in state-owned enterprises (SOEs) and energy infrastructure in the country, the bank said.
The first of the two agreements pertains to the SOE Transformation Program worth $400 million while the second loan, worth $330 million, is for a Power Transmission Strengthening Project, the lender said.
The agreements were signed by ADB Country Director for Pakistan Emma Fan and Pakistan’s Secretary of Economic Affairs Division Humair Karim.
“The agreements demonstrate ADB’s enduring commitment to supporting sustainable and inclusive economic growth in Pakistan,” the ADB said.
Pakistan’s SOEs have incurred losses worth billions of dollars over the years due to financial mismanagement and corruption. These entities, including the country’s national airline Pakistan International Airlines, which was sold to a private group this week, have relied on subsequent government bailouts over the years to operate.
The ADB approved the $400 million loan for SOE reforms on Dec. 12. It said the program seeks to improve governance and optimize the performance of Pakistan’s commercial SOEs.
Karim highlighted that the Power Transmission Strengthening Project will enable reliable evacuation of 2,300 MW from Pakistan’s upcoming hydropower projects, relieve overloading of existing transmission lines and enhance resilience under contingency conditions, the Press Information Department (PID) said.
“The Secretary emphasized that both initiatives are transformative in nature as the Transmission Project will secure Pakistan’s energy future by strengthening the backbone of the national grid whereas the SOE Program will enhance transparency, efficiency and sustainability of state-owned enterprises nationwide,” the PID said.
The ADB has supported reforms by Pakistan to strengthen its public finance and social protection systems. It has also undertaken programs in the country to help with post-flood reconstruction, improve food security and social and human capital.
To date, ADB says it has committed 764 public sector loans, grants and technical assistance totaling $43.4 billion to Pakistan.
